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Yellen Takes the Stand

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With Ben Bernanke termed out on January 31, 2014, nothing much is expected to change with accommodative Federal Reserve monetary policy. Yesterday, Federal Reserve Vice Chairman Janet Yellen came forward before the U.S. Senate Banking Committee for her confirmation hearing. Political theater played in the background as some policymakers tried to act tough with the Fed Chairman nominee. Already holding the #2 slot at the Federal Reserve, Yellen’s confirmation is all but a shoe-in. However a Republican senator on the committee, David Vitter of the state of Louisiana, plans to oppose her. Earlier in November, Senator Vitter took a stand speaking out against the Federal Reserve’s bond buying program.

Magic bullet measures such as bond buying and asset purchases by the central bank will likely continue.

In 2008, the Federal Reserve played their QE card and moved to bring interest rates to zero. Yellen reiterated the only thing to do is to “to do everything possible to promote a very strong recovery.” With ease, Yellen demonstrated that the overall risk is worth the unintended consequences of quantitative easing, playing down the notion of asset bubbles forming in various markets. With boldness, she indicated a continuation of the Federal Reserve’s extraordinary monetary stimulus under her watch. Magic bullet measures such as bond buying and asset purchases by the central bank will likely continue. Money managers are happy Yellen is in the chair, as equity markets would tank with a less dovish central bank head.

Asset owners such as U.S. pensions face dire consequences due to the Fed’s accommodative policies. Encouraged risk-taking and speculation into asset classes such as life settlements, re-entering the CMBS market and illiquid assets proliferated in Pensionland.

PNB to Buy Stake from Malaysian Developers in Battersea Power Station Project

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Malaysia-based Permodalan Nasional Bhd (PNB) inked plans to acquire a stake in the Battersea Power Station from Malaysian developers Sime Darby Property and SP Setia, which between them own 80 percent of the site located on the south bank of the Thames. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Will Saudi Arabian Sovereign Wealth Be the Next Giant in Hollywood?

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Saudi Arabia’s growing Public Investment Fund (PIF) is reportedly looking into investing over US$ 500 million for a 5% to 10% stake in Hollywood’s Endeavor Talent Agency, the holding company for William Morris Endeavor Entertainment LLC (WME). WME is one of the biggest players in the business, representing well-known artists across a number of different mediums – including cinema, television, music, books, and theatre – as well as a roster of professional athletes from the National Football League (NFL) and National Hockey League (NHL). Discussions are in their initial stages, however, and no commitments have been made thus far. WME is constantly gathering new talent. Recently WME signed musician John Mayer and actor Nicolas Cage – both were with Creative Artists Agency (CAA).

A Logical Connection

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CDPQ Providers Firepower for Blackstone Buyout of PIRET

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Ivanhoé Cambridge, part of CDPQ, is a co-investor in Blackstone Group’s buyout of Pure Industrial Real Estate Investment Trust (PIRET), a listed Canadian warehouse owner. The actual Blackstone buyer is an affiliate of Blackstone Property Partners, its core real estate investment unit. The agreement was revealed on January 9, 2018. Blackstone moved to buy the REIT) for C$ 8.10 per Unit in an all-cash transaction valued at C$ 3.8 billion including debt. The transaction value without debt is C$2.48 billion.

Deal Advisors

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